Relationship between crime and economic affluence in India: an empirical study from 1982 to 2013

Abstract

Purpose There have been limited studies which investigate the interlinkage between crime and economic affluence. The purpose of this paper is to investigate the linkage between crime and economic affluence in India. Design/methodology/approach The study is based on annual data spans over the time period 1982-2013. Standard econometric tools like unit root test, co-integration and two stage least square technique have been used to analyze data and to draw inferences. Findings The study finds that crime and economic affluence are interlinked in India. However, the nature of the linkage is not uniform over the time span. It is observed that economic affluence affects violent crime positively in the long run, but crime effects affluence negatively. In the short run, however, the relationship between crime and economic affluence is observed to be reversed. Originality/value This study is first of its nature to investigate the bi-directional linkage between crime and economic affluence in India. This study helps us to understand that controlling the crime rate is the urgent need of the hour to alleviate the pace of long run economic affluence in India.

Links between crime and economic development: EU classification

“…The research results confirmed the findings provided by Sarvaria (2019), Santos et al (2022), Finklea (2011), Kusuma et al (2018), andWang (2020): crime tends to decrease under favourable economic conditions (1st country group: Finland, Luxembourg, Sweden, the Netherlands, Austria, Denmark, Ireland, Germany, Belgium, Slovenia), and, on the contrary, a worse economic situation stimulates a higher crime rate (2nd country group: France, Hungary, Cyprus, Poland, Croatia, Italy, Romania, Lithuania, Greece, Latvia and Bulgaria). There were a few exceptions in the sample of EU-27: although Malta, the Czech Republic and the Slovak Republic (3rd country group) had favourable economic conditions, the crime rates in these countries were high, which is in line with the findings provided by Sarvaria (2019), Freedman and Owens (2016), James and Smith (2017), Street (2019), Debnath andDas (2017), andMulok et al (2016) who state that the probability of crime can increase in an environment favourable to economic growth.…”

“…The cross-country evidence indicates that economic underperformance is explained by the high homicide rate. Debnath and Das's (2017) study of the relationship between crime and economic welfare in India between 1982-2013, based on the unit root test, co-integration and the two-stage least square technique, confirmed that the economy and crime are interrelated, but their results suggest that the nature of this relationship may depend on the time span. The empirical research disclosed that economic growth has a positive effect on the violent crime rate in the long run, but in the short run the relationship between these variables is reversed.…”

“…The analysis of the latest literature allowed to identify three types of the relationship between the economy and crime: − economic development tends to reduce crime and/or the probability of crime is decreasing under favourable economic conditions (inverse relationship) (Sarvaria, 2019;Santos et al, 2022;Kusuma et al, 2018;Wang, 2020); − during the periods of economic downturn, crime rates tend to increase and/or the probability of crime is increasing under unfavourable eco-nomic conditions (inverse relationship) (Sarvaria, 2019;Santos et al, 2022;Kusuma et al, 2018;Wang, 2020); − the probability of crime is increasing with economic growth (direct relationship) (Sarvaria, 2019;Freedman & Owens, 2016;James & Smith, 2017;Street, 2019;Debnath & Das, 2017;Mulok et al, 2016).…”

Foreign direct investment, anti‐money laundering regulations and economic growth

“…It is seen as a major obstacle to the growth prospects of economies around the world. Extant literature contends that crime has negative outcomes on economic growth (Debnath & Das, 2017). Money laundering affects the growth of countries through its impact on the development and stability of the global financial system (Financial Action Task Force [FATF], 2020; Ofoeda et al, 2020).…”

The Relationship between Female Labour Force Participation and Violent Crime in Malaysia: An ARDL Approach

“…Apart from that, violent crime can harm economic affluence in several ways. It may distort long-run investment, freedom of movement of the workforce and emphasize crime control expenditure than economic prosperity (Debnath & Das, 2017).…”